NAOS CEO Insights

CEO INSIGHTS – Week Ending 29 April 2022 By NAOS Asset Management

April 29, 2022

“At this stage, in terms of [transaction] volumes, we have seen no noticeable impact due to inflation, supply chain issues or the war in Ukraine” Alfred Kelly, CEO, Visa Inc

CEO INSIGHTS – Week Ending 29 April 2022 By NAOS Asset Management

“At this stage, in terms of [transaction] volumes, we have seen no noticeable impact due to inflation, supply chain issues or the war in Ukraine” Alfred Kelly, CEO, Visa Inc

As part of the NAOS investment process, we pay particular attention to the comments made by company CEOs and business leaders in order to gain a greater understanding of the current investment environment and key trends that may be emerging. Below are quotes from the week which in our view detail some of the most important and prominent industry trends and economic factors impacting their businesses.  
 
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I.T. & Data

“In the conversations we are having with our customers, the interesting thing I find from perhaps even past challenges, whether macro or micro, is I don’t hear of businesses looking to their IT budgets or digital transformation projects as the place for cuts” Satya Nadella, CEO, Microsoft Corporation

“And what we've seen over the years is a macro event and [its] impact on GDP growth have ultimately little impact on the strategic structural decision on IT spend” Max Chuard, CEO, Tenemos AG

“Data protection has experienced a paradigm shift over the last few years” Market Statement, City Chic Collective Ltd

Inflation

“I have not [previously] seen this level of demand for automation technology to improve productivity because in an inflationary environment, the only deflationary force is software” Satya Nadella, CEO, Microsoft Corporation

“It’s probably going to be a very different environment to the one we were in only six or 12 months ago. For the foreseeable future, if you look the next couple of years out at wholesale [energy price] curves – they are trending upwards” Christine Corbett, CEO, AGL Australia Ltd

Food & Beverage

“There's still some pockets of COVID, particularly in China at the moment, but also Southeast Asia. We are seeing absolutely record inflation. And the supply chain disruption is still there. So probably [this is] one of the more difficult periods that I have known in my career from an operational perspective” Dirk Van de Put, CEO, Mondelez International Inc

“The fundamentals for malting remain positive. Beer remains a significant and growing beverage category while demand for craft beer and ancillary products continues to accelerate. Demand for distilling continues to grow” Mark Palmquist, CEO, United Malt Group Ltd

Electrification

“Automotive customers today are generally forced to make a choice between cells that offer higher energy but lower power or higher power but lower energy. We believe that in order to substantially improve both power and energy simultaneously, new battery chemistries are required” Jagdeep Singh, CEO, QuantumScape Corporation [lithium metal batteries company]

Industrials & Machinery

“As you know, demand is very strong for our product. The biggest challenge is actually being able to supply the market. If we were able to put more products into the channel, we would sell more” Andrew Bonfield, CFO, Caterpillar Inc

Payments & Lending

“At this stage, in terms of [transaction] volumes, we have seen no noticeable impact due to inflation, supply chain issues or the war in Ukraine” Alfred Kelly, CEO, Visa Inc

Financial Markets

“Despite the current turmoil, we remain convinced that long-term trends benefiting MSCI, including the indexation and globalisation of [investment] portfolios, will endure” Baer Pettit, COO, MSCI Inc

“We are essentially at a point where any company or fund that cannot demonstrate deep environmental, social and governance credentials, which naturally spans a wide range of sustainability and social issues, will simply be ‘uninvestable’ to institutional investors” Dugald Higgins, Head of Responsible Investment & Real Assets, Zenith Investment Partners

Travel

“Speaking of travel, people are seemingly back on the move, whether they're searching for planes, passports or their next vacation destination. Q1 travel searches were above Q1 '19 pre-pandemic levels. Growth in categories like beaches and islands were up 27% versus 2019, while vacation rentals rose 37%. Compared to last year, global searches for passport online jumped 80%, while searches for travel insurance surged 2x” Philipp Schindler, Chief Business Officer, Alphabet Inc

Retail

“Beauty, especially skincare, is unique within the broader retail market and is resilient to economic challenges” Tennealle O'Shannessy, CEO, Adore Beauty Group Ltd

Chinese Economy

“Restrictions relating to COVID-19 have impacted logistics and steel demand, with an expectation that policy settings in China will support steel demand and production in CY22” Market Statement, Fortescue Metals Group Ltd

Social Media & Video

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated” Elon Musk, CEO, Tesla Inc

“And even as people have returned to in-person activities, time spent on YouTube has continued to grow” Sundar Pichai, CEO, Alphabet Inc

Workplace

“On the market itself, more and more companies globally are embracing hybrid working. And the uncertain situation, lets say, economically [during 2022] is helping that. Its pushing companies to make earlier decisions about the move to hybrid. They already know its what their people want” Mark Dixon, CEO, IWG plc [world’s largest co-working space provider]

Mining & Resources

“The outlook for the mining and exploration industries reflects current commodity pricing trends and increased investment into the sector after a decade of underinvestment. Current market commentary indicates the industry has now entered a significantly improved commodity cycle” Market Statement, Boart Longyear Group Ltd

 

Important information: This material has been prepared by NAOS Asset Management Limited (ABN 23 107 624 126, AFSL 273529) (NAOS) for general information purposes only and must not be construed as investment advice. Certain economic, market or company information contained in this material may have been obtained from published sources prepared by third parties. Nothing contained herein should be construed as granting by implication or otherwise, any license or right to use such third party content without the written permission of the owner.